Footwear company, Allbirds has announced plans to reduce its workforce and implement cost-saving measures in response to its financial performance. The company reported a net loss of $101.4 million in 2022, compared to a loss of $45.4 million in 2021. The net loss margin increased to 34.0% from 16.4% in the previous year.
To address these financial challenges, Allbirds has introduced “Simplification Initiatives” aimed at cutting costs and generating revenue. These measures include slowing down the pace of new hires and replacements, reducing the global corporate workforce by 8% through layoffs, and transitioning to a hybrid work model by reducing corporate office space. Additionally, the company plans to optimize inventory, automate distribution centers, and scale manufacturing to lower operating costs and product carbon footprints.
These initiatives are expected to generate annualized savings in selling, general, and administrative (SG&A) expenses of between $13 million and $15 million, starting in 2023. However, they will also incur non-recurring costs of between $18 million and $24 million.
Despite the financial setbacks, Allbirds remains committed to its sustainability goals. The company aims to achieve a 50% reduction in its per-product carbon footprint by 2025 and a near-zero per-unit carbon footprint by 2030. To reach these targets, Allbirds will focus on regenerative agriculture, renewable materials, and responsible energy use. The company plans to source 100% of its wool from regenerative sources, reduce raw material usage by 25%, and use 100% renewable energy at its owned and operated facilities.
Allbirds’ commitment to sustainability extends beyond its own operations. The company intends to share information about its climate goals and collaborate with other businesses and growers in its supply chain to transition to clean energy and regenerative practices.
As Allbirds navigates its financial challenges and continues to prioritize sustainability, the company’s workforce reduction and cost-saving measures will be closely watched by investors and industry observers.